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The Rogak Report: 05 October 2004 ** No Fault - EUO No Shows **

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  • Lawrence Rogak
    DENIAL OF NO-FAULT CLAIM BASED ON EUO NO-SHOW IS VALID FOR CLAIMS FILED AFTER 4/05/02 EVEN IF ACCIDENT OCCURRED PRIOR TO THAT DATE Ocean Diagnostic Imaging
    Message 1 of 1 , Oct 5, 2004
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      DENIAL OF NO-FAULT CLAIM BASED ON EUO NO-SHOW IS VALID FOR CLAIMS
      FILED AFTER 4/05/02 EVEN IF ACCIDENT OCCURRED PRIOR TO THAT DATE

      Ocean Diagnostic Imaging P.C. v. State Farm Mutual Automobile
      Insurance Co., NYLJ 10/04/04 (Civil Court, Kings County) (Nadelson,
      j.)

      Plaintiff, a medical provider No-Fault benefits, moved for summary
      judgment based on defendant-insurer's failure to pay or deny
      plaintiff's claim within the statutory 30 day period following
      submission of the claim.

      The insurer opposed the motion for summary judgment based on EUO no-
      shows by the assignor. The insurer also alleged that the loss is not
      a covered loss because the accident was staged, thereby rendering
      Plaintiff's assignor a non-eligible party.

      Plaintiff asserted that the EUO no-show is not a valid basis for
      denial because the statute authorizing such basis did not go into
      effect until after the incident in question. Further, Plaintiff
      maintains that any accusation of fraud with respect to the claim made
      by Defendant has been made against the other individuals involved in
      the incident but not against its assignor.

      The insurance policy in question was issued by defendant on March 3,
      2002. The accident occurred on March 20, 2002. Plaintiff's claim was
      received by defendant on May 16, 2002. After submission of the claim
      defendant requested an examination under oath of Plaintiff's
      assignor. Plaintiff's assignor failed to appear and a second EUO was
      scheduled, which she also did not attend. On December 13, 2002,
      Defendant issued its denial of benefits to Plaintiff.

      The effective date of the new no-fault regulation is April 5, 2002,
      and these new regulations provide the authority for an insurer to
      deny first party benefits to medical providers whose assignors fail
      to attend EUOs.

      Plaintiff's argument rested on the fact that the effective date of
      the regulation was subsequent to the date of the accident and
      therefore is inapplicable to this case. In support of this
      contention, Plaintiff relied on Bronx Medical Services, P.C. a/a/o
      Gladys Rivera v. Lumbermans Mutual Casualty Co., 2003 NY Slip Op
      51022U, 2003 N.Y. Misc. LEXIS 777 (1st Dept. 2003), which states
      that "the revised regulations cannot be applied retroactively to
      cover plaintiff's September 2000 no-fault claim." However, held the
      Court, "The facts in this cited decision are clearly distinguishable
      from the case at bar" because in Bronx Medical, only the insurance
      policy, and not any statute, required EUOs. The new no-fault regs
      were not enacted until after the accident in that case, and the Court
      in that case refused to apply the new regs -- which were in effect by
      the time the lawsuit was commenced -- retroactive effect.

      "In the instant case, the regulation applies to the insurance policy
      issued by Defendant in March of 2002. The only question to be decided
      by this court is whether the regulation applies to claims filed after
      its effective date relating to accidents occurring before its
      effective date."

      Regulation 68-A does not apply retroactively to claims filed before
      its effective date, held the Court. "By contrast, the claim for
      benefits in the instant case was filed more than a month after the
      regulation came into effect, and the insurance policy upon which the
      claim is based is subject to the regulation because it was issued and
      effective after September 1, 2001. Therefore, the court holds that
      Regulation 68-A applies to claims filed after its effective date and,
      consequently, the court denies Plaintiff's motion for summary
      judgment."

      Turning to the other issue, the court held that "Defendant's argument
      that Plaintiff's assignor is not a covered person because of alleged
      fraud to be without merit.... Defendant has failed to provide any
      evidence of fraud with respect to Plaintiff's assignor. All
      assertions of fraud are made against the other parties to the
      incident, and therefore are not relevant to the assignor in question."

      Comment: This is a decision of significant impact for no-fault
      insurers. Remember the rule: if the claim is filed after 4/05/02,
      the insurer can deny the claim based on EUO no-show, even if the
      accident occurred before 4/05/02.
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